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As the so called “gig” economy gets stronger and online freelancing is increasingly viewed as a viable alternative to office jobs, electronic money transfers become more and more critical for many individuals. An average freelancer is spending anywhere from 5-15% of his revenues on bank fees alone, so any idea that can reduce this number would be much welcomed by the community of online workers. While it’s impossible to affect bank policies and their financial conditions, there are a few tried and true tricks that smart freelancers use to minimize the monthly percentage that goes into the bank’s coffers.

1. Avoid small transactions. Banks hate small transactions since they take up a lot of their staff’s time, so they charge for them disproportionately. If you are constantly moving money in and out of your account, bank fees are likely to pile up in a hurry. It’s more prudent to wait a little bit and put multiple items on the same bank order than to arrange a series of very small transactions. It’s also a good practice to check the exact rules at your local bank when you open the account so that you can identify the threshold where transactions become more affordable to execute.

2. Make strategic withdrawals. Those who work for the global market are sometimes forced to pay for wire transfers, which are notoriously expensive when they travel across international banking systems. Simplifying the path the money has to go through and limiting international withdrawals to one or two per month goes a long way towards saving on bank fees. Of course, preferable withdrawal frequency depends on the exact location where the freelancer is residing and the country where a majority of his clients are located, so it’s best to plan based on individual circumstances.

3. Pick an account with low bank fees. Doing a little bit of research on best banking deals can pay off big time if you’re able to find a provider with significantly lower banking fees. With so much competition in the international banking sector, some companies are inclined to offer favorable conditions for new account holders. With some luck, you should be able to find a reputable banking institution that doesn’t charge exorbitant fees on every transaction. Even a small difference per transaction matters if you are making withdrawals every month, so freelancers shouldn’t be too shy to switch banks.

4. Invoice for services directly. Most freelancers work through online platforms, but in some cases it’s possible to arrange direct payments to a bank account. If the money travels through fewer hands, the banks will have fewer opportunities to nibble on it. Ideally, freelancers should demand a round sum to be received and let the client handle any expenses above and beyond that number. Of course, working in this way requires a level of trust to exist between the service provider and the client, and can be risky when collaborating with new clients for the first time.

5. Avoid currency conversions. Conversion is another factor that can complicate matters and cause additional loses. Freelancers often accept multiple currencies and are sometimes stuck exchanging them at the least favorable rates used in inter-bank business transactions. Maneuvering to receive payments in the preferred currency might not be easy, but savings can be large enough that it’s worth trying. In some situations it even makes sense offering a small discount to clients who pay with the currency that requires the fewest conversions before it can reach your pocket.

6. Use an e-wallet. Perhaps the best way to cut down on bank fees is to stop using bank’s services at all and rely on electronic payment services such as PayPal to deal with daily expenses. These days, you can pay for almost anything with PayPal directly from your mobile phone, while there is a way to withdraw cash from an e-wallet account. It’s probably not possible to completely eliminate the bank from the equation at this stage, although funds received from online clients can be directed to straight to online payments. While e-payment services are certainly not provided for free, they are generally charge much less than a typical bank.


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